Thursday, June 2, 2016

This marks the first month of our family being "gazelle intense" with our debt. We're looking at a pretty big mountain and, quite frankly, it's overwhelming! When we look at Dave's Baby Steps, all I can really focus in on is Baby Step 2 ("Pay off All Debt but the House") - Because we're gonna be there for a very long time! Paying off all debt is just one giant goal, but there are going to be dozens if not hundreds of little goals that will have to happen along the way. Since Blake is still in graduate school and we aren't both working true full-time jobs (even though Blake puts in more hours than most full-time employees!), our Baby Steps are going to have to look a little different for now. We are going to first have to really hone in on our budget in order to reduce (or eliminate) future debt. We are looking very closely at ways to make our budget work for us so that we don't need a loan for the upcoming school year. That's a big task, but we're up for it!

On or around the first of each month, I'll post a snapshot of our "itty bitty Baby Steps" on Instagram so that you are able to see what we are doing, little by little, to take on this debt. And, on the blog, I'll write a little more in detail about those monthly goals and also re-cap the previous month's goals and share how we did.

I'm a really goal-oriented person, can you tell?

Debt:

Still not ready to share the big number, but now you know it's somewhere between $10,000 and $99,999! As Dave's Baby Steps recommend, we will be making our minimum payments on all of our current debts until we have completed Baby Step 1.

Goals:

1. List out all debts and post at home

Pretty self-explanatory, right? It sounds like a silly goal, but if you are in debt you know how hard it is to look at those very real numbers. It hurts! But this is necessary to remind ourselves of what we are facing. Seeing those numbers every day is a great way to stay motivated.

2. Unsubscribe to YNAB, Ipsy & Hulu

These are just three subscriptions we have that aren't really necessary. YNAB is actually a great budgeting tool, but I found a site I like better (see goal 5!) so there's no need to keep paying. All in all, this will save us $25.99 a month. That's not a lot, I know. But every little bit helps! And while Ipsy & Hulu are both great, they just aren't really necessary. And now we have $25.99 more a month to put towards Baby Step 1!

3. Save toward Emergency Fund

This is Baby Step 1! We currently have over half of the $1,000 in our emergency fund. We actually have more than that in savings, but that money is "ear marked" for future expenses. Since Blake's stipend is only ten months out of the year, we have other savings that we use for those months when he doesn't get paid. So, we aren't going to consider that part of our $1,000 emergency fund.

4. Decrease grocery spending

I love buying groceries. Love, love, love! So this is a hard area for me. I'll write a more detailed post about how I'm doing this, but for now... just know that I've cut my grocery budget by $200 and I'm terrified!!!!!

5. Track budget diligently

We are using Dave Ramsey's Everydollar.com to track our budget and his We are using zero-based budgetingplan. We've tried other sites in the past (including YNAB, as mentioned above) but, so far, Every Dollar is working the best for us, especially for zero-based budgeting. We know it will take about three months to get our budget "right," so I know it will be a learning curve, but I'm up for the challenge! By tracking it regularly (as in, daily) we can hopefully better adhere to the limits we've set for ourselves.

Follow along with us and join in on the journey!!!! We're gonna be DEBT FREE.... one day!!!

Monday, May 30, 2016

Getting out of debt can be such a huge challenge! It is not something that can be done overnight or in just a few weeks (unless you only have a little bit of debt)! But, for most people, especially those of us who are dealing with student loans, you're talking tens of thousands of dollars of debt. And it can take years to pay those off. Right now, we are looking at at least 6-8 years before we can be debt free. Hopefully as we advance in our careers, we can lessen that timeline as our incomes increase. But, for now, that's the time frame we are looking at. Six or eight years sounds like a really long time. But, research shows that despite the intention for student loans to be repaid within ten years, it often takes people closer to 20 years (or more!) to pay off their loans!!! Twenty years of debt for four - maybe six - years of college! That is silly! That's like buying a car, driving it for four years, but paying on it for twenty! I don't know about you, but I'd like to get rid of student loan debt as fast as possible so that we can enjoy the present and our future! And can you imagine continuing to pay on your own student loans while paying for your child to go to college? Even harder to imagine! So, yes, six to eight years sounds, feels, and is a long time. But it is nothing compared to the estimated 19.7-23 years it takes many people to pay of the debt.Part of why we have waited this long to start getting "gazelle intense" is simply our current situation. Blake's in grad school, which means he gets a humble stipend and I am the sugar-mama, working full-time. Blake also works a part-time job as a tutor that pays really well, but it varies from month to month how much he works. This has made it difficult to budget and while we've been paying on my loans (his aren't due just yet), we are barely able to make a drop in the bucket. So for the past couple of years, my mentality has just been that we would do what we could now and really deal with it later - when he is done and we are both working full-time jobs.But, y'all, "later" is expensive! Even though interest rates on student loans are fairly reasonable, it accumulates quicker than you realize! My student loans have been sitting around, growing interest while we've been postponing our aggressive plan. Despite our mistakes with these loans, we are looking to the future with hope and excitement, even. We know we mean business and we are going to tackle these loans once and for all and, eventually, be debt free!

Today starts a new chapter in the financial life of Blake & Katie! We are excited about tackling our budget and taking down our debt. We've been ignoring the debt cloud hanging over us for pretty much our whole marriage (5 years this June!) - aware that it was there, but assuming we could just deal with it "later". Well, "later" is too far away, so we want to handle it N-O-W!I am going to be posting a lot (maybe not on my blog necessarily because - newsflash: I have two kids and a full time job! - but definitely on my Instagram & Facebook accounts) about our journey towards a debt free life. This is not meant to be a brag-fest or anything like that, but I've just learned over the years that we aren't the only ones in this situation! Just in the few days that I've been posting on budget topics, I've had a handful of people tell me they're in the same boat and working towards the same goal! So, this is meant to be an encouragement, of sorts, for those of you out there who are also working to get out of debt or just to have a healthy family budget. And it's a tool for me to hold myself accountable throughout this process.

I'm certainly no expert when it comes to money - which is kinda how we got into this mess we're in! But I've learned a lot over the years and I feel like we are taking the right steps to live without debt. Speaking of steps...I guess this inaugural post should somewhat explain what we're dealing with in "big picture" terms and how we are going to deal with it.

The Debt:

Our largest debt is student loans. I took out loans to pay for my undergrad and we have taken out some loans for Blake over the past three years. We currently also have a few hundred dollars on two different credit cards. I'm really not ready to share the total sum of our loans because... well... it's a hard pill for me to swallow right now. But I will eventually be sharing that number because I believe being fairly transparent in this process can be a big encouragement to other people who are in the same situation.

The Plan:

We are going to follow Dave Ramsey's Baby Steps. If you've never read Dave Ramsey's plan, stop what you're doing and read it NOW! It's so simple and makes so much sense. Suze Orman also has a pretty solid plan, but she "allows" you to use credit cards. I have learned in my thirty years that I cannot be trusted with a credit card! So, I feel more comfortable sticking with Dave's plan, in which he highly discourages use of credit cards. Plus, I really like Dave Ramsey's daughter, Rachel Cruze, who works alongside her dad in helping people eliminate debt!

The Team:I feel like I should mention that Blake and I are both very involved in this process, but I am the more budget-minded/planner in our family. Blake and I are a team and I won't be sharing any information we haven't agreed to share.

Like, I said, that is VERY BIG PICTURE of our overall plan! In future posts, I'll be more specific about all the many little ways we are working to get out of debt! Stay tuned!

Katie Jane Says...

The Foundation

God presented him as a sacrifice of atonement, through faith in his blood. He did this to demonstrate his justice, because in his forbearance he had left the sins committed beforehand unpunished— he did it to demonstrate his justice at the present time, so as to be just and the one who justifies those who have faith in Jesus. - Romans 3:25-26